THE NUMBER of first time buyers has swelled as the housing market begins to rebound, with LSL Property Services suggesting a 45 per cent increase in the 12 months to July.
There were 26,100 people buying homes for the first time in July, up by over 8,000 through the year, with LSL’s figures suggesting that this is the largest amount since November 2007, before the worst of the financial crisis.
LSL also suggests that the typical rate on a mortgage for first-time buyers has dropped by almost a full percentage point, down from 4.92 per cent to 3.99 per cent.
Despite the rise, there were only 1,460 purchases made under the government’s New Buy scheme in the second quarter of the year, and less than 4,000 in total so far.
The programme currently only exists for newly built houses, in January it will be extended further into the market, when another boost is expected.
Though the number of first-time buyers has picked up dramatically, data from LSL also raises questions about the long-term sustainability of the scheme. Prices for people getting their first step on the property ladder have jumped by eight per cent, up to £146,726 in July.
Legal and General’s director of housing, Stephen Smith, commented: “Without question the largest problem we face is the chronic undersupply of housing sock and the potential upward and unsustainable pressure that could put on prices”
Information from Connells Survey and Valuation added to LSL’s figures, suggesting that August had seen 40% more first-time buyers than the same month the previous year, and one per cent more than the same month in 2007, bucking the usual trend of an August slowdown.
Connells also suggested that remortgaging activity is also considerably higher than it was a year ago, up by 49 per cent since August 2012.